What is Crypto Art or NFTs?
Crypto Art has traditionally been a category of art related to blockchain technology but now, with the rise of NFTs and digital ownership, it’s starting to mean Art that is ‘own-able’ via NFTs on blockchain..
An NFT is a ‘Non Fungible Token’, basically a unique token that is stored on blockchain and can represent the ownership of anything. Whether that’s virtual land, game items, virtual pets, cards, and in this case digital art.
If you own the token, you own the digital item.
This guide will cover how people invest and collect digital or crypto art as NFTs with the intent to protect and grow wealth.
- Crypto Art Market is ~0.06% of Traditional, (Physical), Art Market. (1,600 times smaller).
- Collector & Artist community mostly exist online.
- Cryptocurrency/blockchain allows global money to flow in to the industry and value transacts almost immediately. (Sell art, get paid within minutes).
- The image/gif/video can be copied but the NFT issued by the Artist themselves is considered the ‘original’.
- Key dates, transactions, ownership history, prices sold for NFTs can all be tracked and recorded on blockchain. A trustable historical record for the Art piece.
How Investing in the Traditional Art Market Works.
The Traditional art market has predominantly been perceived as a market for ‘the rich’ or those that have an ‘eye for art’.
There are definitely art pieces that are in the $millions and thus prestigious to own but many still collect from an array of new up and coming artist.
There is usually 2 art types that are bought and can be compared to Crypto Art later.
Originals: Most highly valued, one of a kind drawn/created piece. These are what the top end collectors go for.
Prints: Copies but still have value when issued from the artist. Eventually there will be a finite amount but due to the nature of how easily they can be created, they are usually much cheaper and in the hands of many of the artists followers. For investors or followers with limited funds.
Investors usually amass their collections from Artists they’ve researched in the hopes that they’ll continue to grow their careers, grow their collector demand and subsequently appreciate the value of their Art.
Banksy, although a respected and sought after name now, used to sell his work for $30-$50 at the start, (as did most). In time, as the name and publicity grow, so did the demand for his art and so the price followed.
Below is a snippet from an article covering a Sotheby Banksy Auction for a version of the iconic Girl with Balloon (2004),
“When the consignor purchased it in 2004 from Pest Control, she told me she paid £275 [around $500],” said Yessica Marks, a deputy director and senior prints specialist at Sotheby’s in London.
The collector got in touch with Sotheby’s after reading about the 2018 shredding of another version of Girl with Balloon. “She called us to get an insurance valuation, and she was so shocked to learn that it was worth £80,000 to £120,000, she decided to consign it.”
It ultimately went on to sell for 5x this estimate, £438,500 ($567,000), 1,000x on a 16 year hold!
How Investing in Crypto Art Works
Ok now for the juicy part of the guide.
Crypto Art Investing is fairly new, it has existed for a while but really started to take off when Art Dedicated platforms like Known Origin, Superrare, Mintbase, etc started using NFTs, (ERC721 Tokens on Ethereum), to allow creators to ‘tokenize’ their work.
Effectively allowing there to be an ownership concept to digital art work.
This opened the doors for Collectors to come in, track artists, buy the NFT of the art piece they liked and thus the collector-creator loop fulfilled. We’ll go through some platforms where you can buy/sell Crypto Art later but for now let’s cover some investor mechanics.
1. Researching the Artist & Art
Usually people go for art they like and appreciate so they know others will appreciate the art too but with crypto art we have data on blockchain to show us what is appreciating in value.
Most artists grow their social media profiles too. With data and social profile growth, this has attracted a lot more people with crypto to start collecting or investing in Crypto Art thus accelerating prices.
You can check out cryptoartpulse.com at any time to see all the recent sales in general or specific artists.
Let’s search a few artists to monitor their economic activity.
If we set the ‘Sale Price Filter’ to 5 ETH+ we see the below,
Artist ‘Joyworld’ stands out. I know this Artist has been selling Art for most if not all of 2020 and has done well but let’s pretend we don’t know any of this.
Let’s search ‘joy’ in the search bar and pull up all their sales.
We see a decent amount of sales in December, recent sales in the ‘6-10 ETH’ range and even a secondary sale with a huge profit.
Let’s scroll all the way down to see what the early pieces used to sell and when the artist first started selling.
We see 0.5-1.5 ETH is what they used to sell for a year ago. Now, they sell for 6-10 ETH, I’d say that’s a healthy appreciation!
Joy is a great example of an Artist dedicating a year+ to their Crypto Art career, continuing to sell one of a kind art pieces and increase their collector demand.
We can even go deeper and click the ‘Secondary Sales’ button to see what resales have happened and make sure that there’s a good spread of ‘owner’ wallets.
If you follow him on Twitter, you can keep up with his updates. You’d be able to see all the cool stuff he’s making, how many people interact with him, and any big career moves like when he was covered by Adobe!
See how it all starts piecing together?
Data provides economic insight, Twitter allows Joy to share his progress & story and for an investor or collector who can clearly see all this, an educated decision can be made to invest in the future of the Artists career.
Joy is one of MANY artists that are doing great in many regards.
Below we can see Josie’s art where most are multi-editions so go for a variety of prices. Most important is resales are happening and each set is increasing in value.
She runs a podcast, is active on Twitter and has collaborated with other large crypto projects out there.
I am so excited to welcome NFT artist and Creator of #Top5NFT Show, 🥳@stellabelle🚀, on Behind the Art tonight!— josie (@josiebellini) December 17, 2020
Check out her work on @makersplaceco before the show 🔥🔥🔥 https://t.co/sWIzVCcScE
Join us live at 7PM PT | 10PM ET on YouTube https://t.co/Yk4zKUD8Jt pic.twitter.com/aqGE6ledUo
Some Art Platforms also have their own data section for example Nifty Gateway. If you click on the ‘stats’ page you can see the top sales.
We can see the piece ‘The Last Stand of the Nation State’ by Slimesunday, (A popular Instagram Artist), has had a recent $400 sale, (a 10x from the original $40!).
555 total sales which indicates 136 secondary market sales. EXTREMELY Healthy.
If we dig deeper we can see the progression of these sales. It seems many happened in December,
Basically, data gives us insight to the health of an Artists progression. Of course, how they’re doing in their career, on Twitter matters heaps but this gives us the economic progression.
Usually dealers and curators will sift through traditional art to provide intel on what’s valuable and what’s not based on the time, artist, quality, etc but since the Crypto Art space is new, most research is done via data and checking the artists profile yourself.
For example, I purchased some Fewocious pieces a few months ago. Before I did, I checked out the Artists twitter and really liked the way Fewo supported other artists, was passionate about art, regular on sharing stories on social media, made really cool art that I loved the style of and just had so much going on that assured me the artist is serious about an art career.
So I bought all remaining pieces, (3 NFTs at the time, for 5-6 ETH, (~$3,000 USD each), which she then shared a wholesome video on Twitter..
being emotional bc i’m so thankful for the support lately pic.twitter.com/wkG50VDEAa— FEWOCiOUS (@fewocious) September 3, 2020
Soon after Anthony Pomp released his support and selection of Fewo being an artist he’s collecting from.
“In my opinion, FEWOCIOUS is the best digital artist in the world. We have commissioned a 6-piece collection that takes radical new ideas and merges it with the FEWOCIOUS style of pop art that has become globally recognized. The first piece in the collection that we are sharing publicly is titled “The Innovator’s Dinner.”
Then, the Art market and NFTs in general blew up with many top crypto influencers like Alex Saunders from Nuggets News, Ivan on Tech and Altcoin Daily, covering Fewo’s journey.
And now, the most recent 1/1 edition Crypto Art piece of Fewocious on Nifty Gateway sold for $25,000 USD!
The purpose of highlighting this story is to show how art appreciation works in the Crypto Art space.
For the most part, it’s similar to traditional art investing but due to the nature of being ‘born’ in a crypto environment, it’s moving at hyper speed as investors are throwing crypto, (ETH that many bought for $2-$50 back in the day), at art.
So we have artists that are creating art, selling them, collectors promote the artists, more collectors want pieces and as crypto goes crazy, people get more spend power which means more money thrown at art.
The digital industry is becoming a space where data, art, and money can be digested and transferred at a quick enough speed that everyone can participate. So we have a mix of people that don’t know a thing about art, genuine collectors, flippers, speculators, funds, and even artists buying Crypto Art and thus adding to the acceleration of the market.
Different Crypto Art NFT Marketplaces.
Due to the nature of NFTs, it really doesn’t matter where you buy the Art piece as long as it’s from the actual artists account. (Many artists have accounts on multiple platforms).
You can take that NFT and sell it on another Marketplace or take it to Decentraland and hang it in your virtual gallery.
BUT, in saying this, there are definitely some art platforms that have more collectors watching them and thus we’re seeing some demand higher prices.
I’ll cover the popular Art Platforms below and how/why they’re different. Most of them aren’t just a marketplace but are curators with an approval process.
Exclusively sells 1/1’s, (Meaning single editions). Each piece is unique. On one of the most popular platforms by volume.
Do art ‘drops’ where 1-3 times a week an artist will drop a series of art. They generate a lot of hype due to the nature of these drops with some art pieces having a limited mint number. Eg, (only 100 available), or a limited time, (5 minute open drop).
This is where Beeple did his $3.5M Art Drop and over the last 1-3 months Nifty Gateway has really been picking up wider interest.
Their auctions also generate a lot of social media attention which is also a contributing factor to their large sales numbers.
A very unique Art platform that doesn’t release art often but release collaborations that explore the benefits of blockchain technology and programmable art.
One of the oldest Crypto Art platforms. A lot of artists sell both single and multi-edition NFTs here.
Also a very popular Crypto Art platform. Also sell single editions and multi-editions. Have had some big record sales and collaborations.
An open marketplace that is well known in the industry. Artists that like to manage their own contracts and like to be platform neutral sell here. Many sell quite successfully managing their own Crypto Art Business/portfolio.
People that have bought from the other art platforms also list their art on Opensea.
A relatively new Marketplace that started off appealing to Artists. It blasted on to the scene based on two things.
– RARI token: 75,000 RARI tokens are distributed to buyers and sellers so a lot of people started using it to sell their NFTs, (Art or not). Including big influencers like Bitboy, Ivan on Tech, Blue Kirby, etc.
– Open platform: meaning there’s no ‘curation’. Anyone can set up and start selling asap. This has a lot of people ripping peoples art and impersonating artists so buyer beware. It DOES have a lot of legitimate artists however.
An open platform where artists and projects can create ‘stores’ to sell art, tickets, etc. Been around for a while and has successfully completed an investment round to start tackling the Music Industry.
I personally research the artist, the art and see if different platforms are seeing different prices. Something cryptoartpulse is good for again.
How Do You Get Involved And Start Investing?
Hopefully the above has given you a lot to work with. This last section is to give you something actionable to start investing in Crypto Art or NFTs.
- Understanding this industry takes time. Let it sink in, take your time exploring the platforms AND follow them on Twitter, participate in discussions, watch some Art drops playout, etc. It’s a deep rabbit hole and can’t be understood by simply skimming the top. I can’t stress this enough!
- Start researching and following some Artists, you’ll get to know their personalities, art style, selling style, mint frequency, etc.
- Start tracking sales. Whether it’s cryptoartpulse.com or another platform, it’s important to know sales history of artists/art.
- Sign up to our Weekly Art reports, we will break down parts of the market and ‘happenings’, strategies, etc.
Do all the above and in 1-2 weeks you should have enough knowledge to confidently take your first steps. Again, let it sink in, whether you buy now or a year from now, we’re still early in hopefully in a whole industry going digital!
Matty – Follow me on Twitter.